Quimbo seeks zero tariff on imported rice amid supply woes

The government should impose a zero tariff on imported rice as a price ceiling on the staple won’t be effective in the long term, Representative Stella Quimbo of Marikina City said Monday.

Quimbo, an economist, was referring to the Executive Order 39 issued by President Ferdinand Marcos, Jr. which sets the price cap at P41 per kilo for regular milled rice and P45 per kilo for well milled rice.

“We know that the price ceiling won’t be effective in the long run because it will cause shortages...In the long run, it won’t be effective in addressing high prices of rice. In the short run, before the EO was issued, there were a lot of hoarders and that was the problem. There is a real supply problem, so the value of the EO is sending a signal to hoarders that we are going to go after you,” Quimbo said in an interview.

“So what are the tools that we need to use now to address the high prices? One is reducing tariffs [on imported rice]. We can make it zero tariff now, especially that we have already met our rice tariff target which is already at P14 billion. We should have a zero tariff for the rest of the year while there is a supply problem,” she added.

The Finance department, for its part, already suggested reducing tariffs on imported rice from 35% to 10%.

House ways and means panel chairperson Representative Joey Salceda of Albay backed the Finance department’s suggestion.

“It is a viable solution for present rice price issues. In general, I am supportive of ensuring that we have all the options necessary to meet our local demand and reduce the consumer price of rice,” Salceda, who is also an economist, said.

“It will also not compromise the implementation of the Rice Competitiveness Enhancement Program [under the Rice Tariffication Law] since the P10 billion in tariff revenues required to fund them has already been met by this year's tariff collections,” he said.

In addition, the awmaker suggested that the rice tariff reduction should be accompanied by more aggressive palay buying operations by the state run National Food Authority to ensure that the surge in imports does not unduly depress farmgate prices.

The Rice Tariffication Law only allows the NFA to source palay locally.

Quimbo shared Salceda’s sentiments on allowing NFA to import rice.

“Temporarily, we should allow NFA to import given that they have buffering stock responsibility,” she said.

Salceda acknowledged that the long-term and sustainable solution is still to produce more rice domestically, in a way that is resilient to climate risks.

“We need to reduce our dependence on rice imports to protect us from rice trade volatility,” he said.

President Ferdinand Marcos, Jr. is the concurrent Agriculture chief.—LDF, GMA Integrated News